CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR … · The Condensed Consolidated Statement of Profit or Loss should be read in conjunction with the TOP GLOVE CORPORATION BHD. Company

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CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS

FOR THE FOURTH QUARTER ENDED 31 AUGUST 2020

Current

Quarter Ended

Corresponding

Quarter Ended

Current

Year To Date

Corresponding

Year To Date

31/Aug/2020 31/Aug/2019 31/Aug/2020 31/Aug/2019

RM’000 RM’000 RM’000 RM'000

Revenue 3,109,116 1,188,974 7,236,317 4,801,139

Operating expenses (1,500,112) (1,100,017) (4,932,440) (4,339,573)

Other operating income 18,634 7,635 52,009 44,297

Profit from operations 1,627,638 96,592 2,355,886 505,863

Finance costs (2,990) (21,041) (53,058) (79,601)

Share of result of associate (1,094) (1,551) (1,428) (2,674)

Profit before tax 1,623,554 74,000 2,301,400 423,588

Taxation (297,541) 10 (397,585) (56,042)

Profit net of tax 1,326,013 74,010 1,903,815 367,546

Profit attributable to:

Owners of the parent 1,291,995 74,166 1,866,999 364,678

Holders of Perpetual Sukuk 25,605 0 25,605 0

Non controlling interests 8,413 (156) 11,211 2,868

1,326,013 74,010 1,903,815 367,546

Earnings per share attributable to owners

of the parent, sen:

Basic 15.95 0.97* 23.31 4.76*

Diluted 15.82 0.95* 23.18 4.74*

* For comparative purpose, the earnings per share for the quarter and year to date ended 31 August 2019 had been adjusted to reflect

the bonus issue of 2 for every 1 existing ordinary share which was completed on 7 September 2020.

Annual Financial Report for the financial year ended 31 August 2019.

The Condensed Consolidated Statement of Profit or Loss should be read in conjunction with the

TOP GLOVE CORPORATION BHD. Company No.199801018294 (474423-X)The World’s Largest Manufacturer of Gloves

Website : www.topglove.com E-mail : [email protected]

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TOP GLOVE CORPORATION BHD.

Company No.199801018294 (474423-X)

(Incorporated in Malaysia)

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


Current

Quarter Ended

Corresponding

Quarter Ended

Current

Year To Date

Corresponding

Year To Date

31/Aug/2020 31/Aug/2019 31/Aug/2020 31/Aug/2019

RM’000 RM’000 RM’000 RM'000

Profit net of tax 1,326,013 74,010 1,903,815 367,546

Other comprehensive income/(loss):

Items that may be reclassified subsequently to

profit or loss:

Net movement on debt instrument at fair value

through other comprehensive income 0 1,856 (2,084) 3,247

Foreign currency translation differences of foreign

operations (9,679) 3,029 (7,210) 17,423

Cash flow hedge 98,277 (8,704) 80,589 (38,787)

Other comprehensive income/(loss), net of tax 88,598 (3,819) 71,295 (18,117)

Total comprehensive income 1,414,611 70,191 1,975,110 349,429

Total comprehensive income attributable to:

Owners of the parent 1,380,942 70,048 1,938,742 345,444

Holders of Perpetual Sukuk 25,605 0 25,605 0

Non controlling interests 8,064 143 10,763 3,985

1,414,611 70,191 1,975,110 349,429

The Condensed Consolidated Statement of Comprehensive Income should be read in conjunction with the


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Company No.199801018294 (474423-X)


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 AUGUST 2020

Unaudited as at Audited as at

31/Aug/2020 31/Aug/2019

Restated

RM’000 RM’000

ASSETS

Non current assets

Property, plant and equipment 3,034,794 2,480,026

Land use rights 0 178,495

Right of use assets 180,674 0

Investment property 163,900 163,900

Investment in an associate 10,425 11,853

Deferred tax assets 8,832 58,472

Biological assets 28 0

Investment securities 392 392

Intangible assets 1,012,320 1,015,970

4,411,365 3,909,108

Current assets

Inventories 525,645 629,896

Trade and other receivables 803,059 592,217

Other current assets 47,924 303,917

Investment securities 1,674,545 87,285

Cash and bank balances 1,210,388 165,782

4,261,561 1,779,097

Total assets 8,672,926 5,688,205

EQUITY AND LIABILITIES

Current liabilities

Trade and other payables 670,671 492,414

Contract liabilities 864,630 55,610

Loans and borrowings 323,319 1,041,325

Lease liabilities 1,714 0

Income tax payables 117,594 789

Derivative financial instruments 871 1,653

1,978,799 1,591,791

Net current assets 2,282,762 187,306

Non current liabilities

Loans and borrowings 217,431 1,379,369

Lease liabilities 3,015 0

Deferred tax liabilities 160,622 159,714

Provisions 3,384 3,190

384,452 1,542,273

Total liabilities 2,363,251 3,134,064

Net assets 6,309,675 2,554,141

Equity attributable to owners of the parent

Share capital 1,675,704 788,326

Treasury shares (1,519) (1,781)

Retained earnings 3,246,308 1,751,963

Other reserves 68,362 (1,553)

4,988,855 2,536,955

Perpetual Sukuk 1,295,262 0

Non controlling interests 25,558 17,186

Total equity 6,309,675 2,554,141

Total equity and liabilities 8,672,926 5,688,205

Net assets per share attributable to ordinary equity holders

of the parent, RM 0.61 0.33*


The Condensed Consolidated Statement of Financial Position should be read in conjunction with the

* For comparative purpose, the earnings per share for the quarter and year to date ended 31 August 2019 had been adjusted to

reflect the bonus issue of 2 for every 1 existing ordinary share which was completed on 7 September 2020.

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TOP GLOVE CORPORATION BHD

Company No.199801018294 (474423-X)


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


Total Distributable

equity attributable Foreign Share Cash flow Fair value Non

Total to owners of Share Treasury exchange Legal option hedge Other adjustment Retained Perpetual controlling

equity the parent capital shares reserve reserve reserve reserve reserve reserve earnings sukuk interests

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM'000 RM’000 RM’000 RM’000

12 months ended 31 August 2020

Opening balance at 1 September 2019 2,554,141 2,536,955 788,326 (1,781) 51,645 10,088 8,995 (80,291) 5,926 2,084 1,751,963 0 17,186

Effects of adoption of MFRS 16, note 1 (56) (56) 0 0 0 0 0 0 0 0 (56) 0 0

1 September 2019, restated 2,554,085 2,536,899 788,326 (1,781) 51,645 10,088 8,995 (80,291) 5,926 2,084 1,751,907 0 17,186

Total comprehensive income 1,975,110 1,938,742 0 0 (6,762) 0 0 80,589 0 (2,084) 1,866,999 25,605 10,763

Transactions with owners

Issuance of ordinary shares pursuant to

ESOS 178,123 178,123 178,123 0 0 0 0 0 0 0 0 0 0

Issuance of ordinary shares pursuant to

conversion of exchangeable bonds 698,783 698,783 698,783 0 0 0 0 0 0 0 0 0 0

Issuance of shares to non controlling

interests 75 0 0 0 0 0 0 0 0 0 0 0 75

Share options granted under ESOS 7,404 7,404 0 0 0 0 7,404 0 0 0 0 0 0

Transfer from share option reserve 0 0 10,892 0 0 0 (11,080) 0 0 0 188 0 0

Transaction cost (5,158) (420) (420) 0 0 0 0 0 0 0 0 (4,738) 0

Transfer from retained earnings 0 0 0 0 0 0 0 0 1,848 0 (1,848) 0 0

Transfer to employee share grant

scheme 1,128 1,128 0 262 0 0 0 0 0 0 866 0 0

Distribution to holders of Perpetual

Sukuk (25,605) 0 0 0 0 0 0 0 0 0 0 (25,605) 0

Issuance of perpetual sukuk 1,300,000 0 0 0 0 0 0 0 0 0 0 1,300,000 0

Dividends on non controlling interests (2,466) 0 0 0 0 0 0 0 0 0 0 0 (2,466)

Dividends on ordinary shares (371,804) (371,804) 0 0 0 0 0 0 0 0 (371,804) 0 0

Total transactions with owners 1,780,480 513,214 887,378 262 0 0 (3,676) 0 1,848 0 (372,598) 1,269,657 (2,391)

Closing balance at 31 August 2020 6,309,675 4,988,855 1,675,704 (1,519) 44,883 10,088 5,319 298 7,774 0 3,246,308 1,295,262 25,558

Attributable to owners of the parent

Non distributable

The Condensed Consolidated Statement Of Changes In Equity should be read in conjunction with the


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TOP GLOVE CORPORATION BHD

Company No.199801018294 (474423-X)


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)


Total Distributable

equity attributable Foreign Share Cash flow Fair value Non

Total to owners of Share Treasury exchange Legal option hedge Other adjustment Retained controlling

equity the parent capital shares reserve reserve reserve reserve reserve reserve earnings interests

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM'000 RM’000 RM’000


Opening balance at 1 September 2018 2,393,768 2,378,481 787,709 (9,325) 36,125 9,164 1,929 (41,504) 0 (1,163) 1,595,546 15,287

Prior year adjustment 4,628 4,565 0 0 (786) 0 0 0 2,898 0 2,453 63

1 September 2018, restated 2,398,396 2,383,046 787,709 (9,325) 35,339 9,164 1,929 (41,504) 2,898 (1,163) 1,597,999 15,350

Total comprehensive income 349,429 345,444 0 0 16,306 0 0 (38,787) 0 3,247 364,678 3,985

Transactions with owners

Issuance of ordinary shares pursuant to ESOS 662 662 662 0 0 0 0 0 0 0 0 0

Share options granted under ESOS 7,197 7,197 0 0 0 0 7,197 0 0 0 0 0

Issuance of shares to non controlling interests 548 0 0 0 0 0 0 0 0 0 0 548

Equity component of exchangeable bonds 1,433 1,433 0 0 0 0 0 0 1,433 0 0 0

Transfer from share option reserve 0 0 41 0 0 0 (131) 0 0 0 90 0

Transaction cost (86) (86) (86) 0 0 0 0 0 0 0 0 0

Transfer to retained earnings 0 0 0 0 0 0 0 0 1,595 0 (1,595) 0

Transfer to legal reserve 0 0 0 0 0 924 0 0 0 0 (924) 0

Transfer to employee share grant scheme 2,716 2,716 0 1,327 0 0 0 0 0 0 1,389 0

Sale of treasury shares 13,936 13,936 0 6,217 0 0 0 0 0 0 7,719 0

Dividends on non controlling interests (2,697) 0 0 0 0 0 0 0 0 0 0 (2,697)

Dividends on ordinary shares (217,393) (217,393) 0 0 0 0 0 0 0 0 (217,393) 0

Total transactions with owners (193,684) (191,535) 617 7,544 0 924 7,066 0 3,028 0 (210,714) (2,149)

Closing balance at 31 August 2019 2,554,141 2,536,955 788,326 (1,781) 51,645 10,088 8,995 (80,291) 5,926 2,084 1,751,963 17,186

Attributable to owners of the parent

Non distributable

The Condensed Consolidated Statement Of Changes In Equity should be read in conjunction with the


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Company No.199801018294 (474423-X)


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW


Current Year Corresponding Year

To Date Ended To Date Ended

31/Aug/2020 31/Aug/2019

RM'000 RM'000

Operating activities

Profit before tax 2,301,400 423,588

Depreciation and amortisation 235,264 194,915

Other adjustments 46,871 88,622

Operating cash flows before changes in working capital 2,583,535 707,125

Changes in working capital

Net changes in current assets (123,997) (35,523)

Net changes in current liabilities 988,232 (6,024)

Cash flows from operating activities 3,447,770 665,578

Interest paid (46,088) (79,601)

Income taxes paid (230,389) (59,786)

Net cash flows generated from operating activities 3,171,293 526,191

Investing activities

(Placement)/withdrawal of investment securities (1,586,540) 110,854

Purchase of property, plant and equipment (765,215) (624,105)

Proceeds from disposal of property, plant and equipment 4,730 12,005

Net cash inflow from acquisition settlement 240,406 0

Interest received 23,628 10,611

Net cash flows used in investing activities (2,082,991) (490,635)

Financing activities

Dividends paid on ordinary shares (371,804) (217,393)

Dividends paid on non controlling interests (2,466) (2,697)

Issuance of shares to non controlling interests 75 548

Proceeds from issuance of shares 178,123 662

Transaction cost (5,158) (86)

Proceeds from sale of treasury shares 0 13,936

Repayment of lease liabilities (1,847) 0

Proceeds from issuance of Perpetual Sukuk 1,300,000 0

Dividends paid to Perpetual Sukuk holders (25,605) 0

Proceeds from issuance of exchangeable bonds 0 814,400

Repayment of loans and borrowings (1,115,014) (637,868)

Net cash flows used in financing activities (43,696) (28,498)

Net increase in cash and cash equivalents 1,044,606 7,058

Cash and cash equivalents at 1 September 2019 / 2018 165,782 158,724

Cash and cash equivalents at 31 August 2020 / 2019 1,210,388 165,782

The Condensed Consolidated Cash Flow Statement should be read in conjunction with the


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NOTES TO THE INTERIM FINANCIAL STATEMENTS


1. Basis of preparation

The interim financial report is unaudited and has been prepared in accordance with Malaysian Financial Reporting

Standard (“MFRS”) 134: Interim Financial Reporting and paragraph 9.22 of the Listing Requirements of Bursa Malaysia

Securities Berhad.

The interim financial report should be read in conjunction with the audited financial statements of the Group for the

financial year ended 31 August 2019. The explanatory notes attached to the interim financial statements provide an

explanation of events and transaction that are significant to the understanding of the changes in the financial position and

performance of the Group since the financial year ended 31 August 2019.

The audited financial statements of the Group for the year ended 31 August 2019 were prepared in accordance with

Malaysian Financial Reporting Standards (“MFRS”). The significant accounting policies and method of computations

adopted in preparation of this interim financial report are consistent with those adopted in the audited financial

statements of the Company for the financial year ended 31 August 2019 except for the adoption of the following new

MFRS and Issue Committee Interpretations (“IC Interpretations”):

Description

Amendments to MFRS 9: Prepayment Features with Negative Compensation

Amendments to MFRS 119: Plan Amendment, Curtailment or Settlement

Amendments to MFRS 128: Long-term Interests in Associates and Joint Ventures

Annual Improvements to MFRSs 2015 - 2017 Cycle

IC Interpretation 23: Uncertainty over Income Tax Treatments

The adoption of the above mentioned standards did not have a material impact on the financial statements of the Group.

Impact of the initial application of MFRS 16 Leases

On the date of initial application, the Group applied the simplified transitional approach and did not restate comparative

amounts for the period prior to first adoption.

The adoption of MFRS 16 to the opening balance as at 1 September 2019 has the following impact:

Audited

31 Aug 2019

Adjustment

After MFRS 16

Adoption

RM’000 RM’000 RM’000

Right of use assets 0 6,430 6,430

Lease liabilities 0 6,486 6,486

Retained earnings 1,751,963 (56) 1,751,907

2. Auditors’ report

The audited financial statements for the financial year ended 31 August 2019 was not subject to any qualification.

3. Seasonal or cyclical factors

The operations of the Group were not affected by any seasonal or cyclical factors in view of its well diversified world

markets and the nature of the Company’s products being disposable gloves.

TOP GLOVE CORPORATION BHD. Company No.199801018294 (474423-X)

The World’s Largest Manufacturer of Gloves

Website : www.topglove.com E-mail : [email protected]

TOP GLOVE CORPORATION BHD. Company No.199801018294 (474423-X) (Incorporated in Malaysia)


FOR THE FOURTH QUARTER ENDED 31 AUGUST 2020 (CONTINUED)

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4. Extraordinary and exceptional items

There were no extraordinary and exceptional items of unusual nature affecting assets, liabilities, equity, net income, or

cash flows in the interim financial period ended 31 August 2020.

5. Changes in estimates of amounts reported previously

There were no material changes in estimates of amounts reported in prior interim periods or prior financial year that have

a material effect in the current financial year to date.

6. Changes in debts and equity securities

a) As at the quarter ended 31 August 2020, a total of 17,075,060 and 59,215,496 new ordinary shares were issued

pursuant to the exercise of the ESOS and conversion of exchangeable bonds respectively. Details of the issued and

paid up capital of the Company as at 31 August 2020 are as follows:

b) During the year, a total 114,000 of treasury shares were transferred to eligible employees under employee share

grant scheme for RM1,128,000; the gain had been recorded in the retained earnings account of the Company.

c) On 22 January 2020, the Company’s 100% ultimate owned subsidiary, TG Excellence Berhad (“TGE”) lodged the

Perpetual Sukuk Programme with the Securities Commission Malaysia (”SC”). The Perpetual Sukuk Programme,

under the Shariah principle of Wakalah Bi-Al Istithmar, is guaranteed by the Company via a subordinated guarantee.

The Perpetual Sukuk Programme provides TGE with the flexibility to issue unsecured and subordinated perpetual

sukuk from time to time, subject to the aggregate outstanding nominal amount not exceeding RM3.0 billion at any

point in time.

On 27 February 2020, TGE completed the first issuance with a nominal value of RM1.3 billion under the Perpetual

Sukuk Programme. The Perpetual Sukuk was issued with a tenure of perpetual non-callable 5 years with an initial

periodic distribution rate of 3.95% per annum.

As at 31 Aug 2020

RM’000

Issuance nominal value 1,300,000

Less: Transaction costs (4,738)

Net nominal value 1,295,262

Other than the above, there were no issuance and repayment of debt and equity securities, share cancellations and resale

of treasury shares in the current quarter and financial period ended 31 August 2020.

No. of shares RM’000

As at 31 May 2020 2,631,873,093 1,169,954

Ordinary shares issued pursuant to the ESOS 17,075,060 144,949

Ordinary shares issued pursuant to the conversion of exchangeable bonds 59,215,496 361,214

Transaction cost 0 (413)

As at 31 August 2020 2,708,163,649 1,675,704




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7. Dividends paid

The Board of Directors of Top Glove has adopted a Dividend Policy to declare and pay annual dividends of 50% of its

profit after tax and minority interest in respect of future financial years.

Record of dividends paid:

Financial Year

Net Dividend

per share

(sen)*

Total Dividend Paid

(RM’000)

2020 3.33 269,411

2019 2.50 191,960

2018 2.83 217,282

2017 2.42 181,936

2016 2.42 181,655

2015 1.92 143,143

2014 1.33 99,009

2013 1.33 99,252

2012 1.33 99,038

2011 0.92 68,035

2010 1.33 98,877

2009 0.92 65,873

2008 0.46 32,389

2007 0.38 27,435

2006 0.31 21,173

2005 0.22 14,110

2004 0.20 12,295

2003 0.15 9,550

2002 0.05 2,808

2001 0.07 4,000

Total 1,839,231

Note: * Net dividend per share has been adjusted to reflect:

a) Bonus issue of 30% in April 2002, 40% in April 2003, 40% in February 2007, 100% in July 2010, 100% in

January 2016, 100% in October 2018 and 200% in September 2020.

b) Subdivision of shares from one ordinary share of RM1.00 to two ordinary shares of RM0.50 each which was

completed in February 2005.




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8. Segmental reporting

a. Primary reporting segment – Geographical segments.

The Group operates in three principal geographical areas of the world and is primarily involved in the gloves

manufacturing industry.

The directors are of the opinion that all intersegment transactions have been entered into in the normal course of business

and have been established on negotiated and mutually agreed terms.


Malaysia

RM’000

Thailand

RM’000

China

RM’000

Others

RM’000

Eliminations

RM’000

Consolidated

RM’000

Revenue

External sales 6,226,223 539,137 127,500 343,457 0 7,236,317

Intersegment sales 259,288 383,990 622 0 (643,900) 0

Total Revenue 6,485,511 923,127 128,122 343,457 (643,900) 7,236,317

Result

Segment profit 2,075,453 200,566 40,280 39,587 0 2,355,886

Finance cost (51,535) (1,120) 0 (403) 0 (53,058)

Share of result of

associate (1,428) 0 0 0 0 (1,428)

Profit before tax 2,301,400

Assets

Segment assets 6,638,965 531,261 177,819 324,932 999,949 8,672,926

Intangible assets 1,012,320 0 0 0 0 1,012,320

Liabilities

Segment liabilities 1,709,701 158,736 94,098 122,501 278,215 2,363,251

b. Secondary reporting segment – Business segments

As the Group is principally involved in gloves manufacturing industry, segment reporting by business segment is not

prepared.

9. Valuation of property, plant and equipment

There was no revaluation of property, plant and equipment brought forward from the previous audited financial

statements as the Group does not adopt a revaluation policy on its property, plant and equipment.

10. Material events subsequent to the end of the interim report

There were no significant subsequent events after the end of the interim period to the date of this announcement, which

will materially affect the earnings or income of the Group.




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11. Changes in the composition of the Group

There were no significant changes in the composition of the Group for the quarter under review, including business

combination, acquisition or disposal of subsidiaries and long term investment, restructuring and discontinuing

operations.

12. Contingent liabilities

A nominal amount of RM433 million relating to corporate guarantees has been provided by the Company to banks for its

subsidiaries’ loans and borrowings.

The fair value of the corporate guarantees granted by the Company to banks in respect of loans and borrowings obtained

by its subsidiaries is not material as the difference in borrowing rates charged by the banks is not significant in the

absence of such guarantees.

13. Capital commitments

As at the end of the reporting quarter, the Company had approved and contracted for capital expenditures amounting

approximately to RM393 million.




12

ADDITIONAL INFORMATION REQUIRED BY BURSA MALAYSIA’S LISTING REQUIREMENTS

14. Review of performance

A comparison of Top Glove’s performance for the full financial year 2020 (“FY2020”) and fourth quarter ended 31

August 2020 (“4QFY2020”) with the corresponding period last financial year is as follows:

4QFY2020

RM’mil

4QFY2019

RM’mil

Variance

%

FY2020

RM’mil

FY2019

RM’mil

Variance

%

Revenue 3,109 1,189 161 7,236 4,801 51

Operating profit 1,628 97 1,578 2,356 506 366

Profit before interest and tax 1,616 92 1,657 2,331 493 373

Profit before tax 1,624 74 2,095 2,301 424 443

Profit after tax 1,326 74 1,692 1,904 368 417

Profit attributable to owners of

the parent 1,292 74 1,646 1,867 365 412

For the quarter ended 4QFY20, Top Glove attained the highest ever quarterly Sales Revenue of RM3.11 billion,

representing an increase of 161% compared with 4QFY2019. Profit Before Tax and Profit After Tax surged by 2,095%

to RM1.62 billion and 1,692% to RM1.33 billion respectively. Meanwhile, Sales Volume grew by 43% versus

4QFY2019.

The Company delivered an impressive results for its full financial year 2020. Sales Revenue for FY2020 amounted to

RM7.24 billion, up 51% from that of FY2019, while Profit Before Tax (PBT) and Profit After Tax also soared to

RM2.30 billion and RM1.90 billion, up 443% and 417% from the previous financial year. Sales Volume also grew by

17% versus FY2019.

The tremendous growth stemmed from a global surge in demand for gloves on the back of the COVID-19 pandemic.

4QFY2020 demand growth was especially strong in Asia, Western Europe and Eastern Europe rising by 110%, 73% and

64% respectively compared with 4QFY19. Most robust was demand for nitrile gloves which grew by 31% year-on-year,

while natural rubber examination gloves also saw growth of 7% versus the corresponding period in FY19. Reflecting

market demand, average selling prices (ASPs) were also adjusted upwards.

The Group’s improved profit was also attributed to productivity enhancements which it continued to embark on, while

the Group’s utilisation levels which remained at close to 100% amplified production efficiency and reaped superior

economies of scale. High utilisation helped lower overheads significantly, notably the cost of labour and natural gas.

Further contributing to the phenomenal results was Aspion with a Profit Before Tax of RM139.9 million, as the Group

started to reap the fruits of its acquisition. The additional capacity provided also helped position Top Glove to meet the

upturn in glove demand.

Raw material prices for FY2020 remained mixed in comparison with FY2019. Average natural latex concentrate price

increased 2.3% from RM4.33/kg to RM4.43/kg. While, nitrile latex price decreased 13.3% from USD1.13/kg to

USD0.98/kg.

To reward its 57,000 public shareholders following the Group’s remarkable performance, the Board recommended a

final dividend of 8.5 sen per share, amounting to a payout of approximately RM691.8 million. This brings the total

FY2020 dividend payout to 11.8 sen per share, amounting to a total payout of approximately RM961.2 million. The

total dividend of 11.8 sen represents an increase of 9.3 sen or 373% over FY2019, which is a net profit payout ratio of

51%.

The healthy cash flow generated by the excellent performance enabled the Group to lower borrowings, which led to a

33% savings in terms of interest cost. Over the course of FY2020, the net cash flow generated from operating activities

was RM3.17 billion compared with RM0.53 billion in FY2019, an impressive increase of 500%. This has considerably

strengthened the Group’s financial position, which enabled the Group to fully settle its syndicated loan of RM654

million during the year. In addition, a total of RM710 million or 87.2% of its Exchangeable Bonds were converted into

Ordinary shares of the Company. As at 31 August 2020, the Group was in a net cash position of RM2.34 billion, in turn

allowing the funding of ongoing organic capital expenditure, dividend payment, future M&As as well as the acquisition

of land bank for business expansion.

TOP GLOVE CORPORATION BHD. Company No. 199801018294 (474423-X) (Incorporated in Malaysia)



13

14. Review of performance (continued)

The financial results of Top Glove since financial year 2008 are as follows:

Financial year ended 31 August

RM ‘mil

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(unaudited)

Revenue 1,378 1,529 2,079 2,054 2,315 2,313 2,275 2,511 2,889 3,409 4,221 4,801 7,236

EBITDA 198 288 365 197 298 311 302 442 525 489 694 687 2,547

EBITDA margin 14% 19% 18% 10% 13% 13% 13% 18% 18% 14% 16% 14% 35%

PBT 135 222 305 146 241 242 216 364 442 393 523 424 2,301

PBT margin 10% 15% 15% 7% 10% 11% 10% 15% 15% 12% 12% 9% 32%

Taxation 27 54 55 30 33 39 33 82 80 55 90 56 397

PAT 108 168 250 115 207 203 184 281 362 339 433 368 1,904

PAT margin 8% 11% 12% 6% 9% 9% 8% 11% 13% 10% 10% 8% 26%

TOP GLOVE CORPORATION BHD. Company No. 199801018294 (474423-X) (Incorporated in Malaysia)



14

15. Comparison of quarterly financial results with preceding quarter

4QFY2020

RM’mil

3QFY2020

RM’mil

Variance

%

Revenue 3,109 1,688 84

Operating profit 1,628 437 273

Profit before interest and tax 1,616 425 280

Profit before tax 1,624 422 285

Profit after tax 1,326 350 279

Profit attributable to owners of the parent 1,292 348 271

For the 4QFY2020, the Group’s Sales Revenue was RM3.11 billion, up by 84%, with growth in Sales Volume (Quantity

Sold) of 5% versus 3QFY2020. Meanwhile, Profit Before Tax and Profit After Tax surged by 285% to RM1.62 billion

and 279% to RM1.33 billion respectively.

Raw material 4QFY2020 in increasing trend compare 3QFY2020, average natural latex concentrate price increased 3.9%

from RM4.39/kg to RM4.56/kg. Nitrile latex price also increased 3.3% from USD0.91/kg to USD0.94/kg.

16. Commentary on prospects and targets

Top Glove will continue to expand its capacity to ensure it is well-positioned to fulfil global glove demand, which is

expected to grow from a pre-COVID level of about 10% per annum, to about 15% per annum post-COVID, on the back

of increased usage in both the medical and non-medical sectors, as well as heightened hygiene awareness. Notably,

Factory F41 which is the Group’s first factory in Vietnam, is expected to come onstream in October 2020, the initial

production capacity for which is approximately 2.4 billion pieces of gloves from its 10 production lines. The Group has

earmarked RM8 billion for CAPEX over the next 6 years from FY2021 to 2026, which will provide us with additional

capacity of 100 billion pieces of gloves. The RM8 billion CAPEX will be invested in new capacity, enhancement of

existing manufacturing facilities, a gamma sterilisation plant, land bank for future expansion, Industry 4.0 digitalisation

and improvements to our workers’ facilities.

The Group’s blueprints for expansion up to CY2022 are illustrated in the table below.

Factories

To commence

production by

(Calendar Quarter)

Location Glove

type

Number of production lines Capacity

(pcs per annum) 1 Double Former (DF) Line =

2 Single Former (SF) Lines

Current: 35 glove factories All 724 Equivalent SF lines 85.5 bn

F37 Block A Lines Refurbishment

3rd qtr CY20 Kluang, Malaysia Latex 1 DF lines 0.2 bn

F36 Lines Refurbishment 4th qtr CY20 Kota Bharu, Malaysia Nitrile 2 DF lines + 3 SF lines 1.0 bn

F41 1st Phase Block 1 NEW

FACTORY 4th qtr CY20 Binh Duong, Vietnam PVC 10 DF lines 2.4 bn

Total new capacity in CY2020 13 DF lines + 3 SF lines 3.6 bn (+4.2%)

Grand total by December 2020 : 36 glove factories 753 Equivalent SF lines 89.1 bn

F40 2nd Phase 1st qtr CY21 Klang, Malaysia Nitrile 8 DF lines 2.3 bn

F8A 1st Phase NEW FACTORY 1st qtr CY21 Sadao, Thailand Nitrile 14 DF lines 4.0 bn

F35 Block A NEW FACTORY 1st qtr CY21 Klang, Malaysia Surgical/

Nitrile 6 DF lines 1.7 bn

F38 Block A2 1st Phase NEW

FACTORY 2nd qtr CY21 Kulim, Malaysia Nitrile 8 DF lines 2.3 bn

F31 Block C New Lines 2nd qtr CY21 Klang, Malaysia Nitrile 7 DF lines 1.9 bn

F37 Block D New Lines 2nd qtr CY21 Kluang, Malaysia Nitrile 3 DF lines 0.8 bn

F41 1st Phase Block 2 3rd qtr CY21 Binh Duong, Vietnam PVC 10 DF lines 2.4 bn

Total new capacity in CY2021 56 DF lines 15.4 bn (+17.3%)


F38 Block A2 2nd Phase 1st qtr CY22 Kulim, Malaysia Nitrile 4 DF lines 1.1 bn

F42 1st Phase Block 1 NEW

FACTORY 1st qtr CY22 Banting, Malaysia Nitrile 12 DF lines 3.4 bn

F45 1st Phase NEW FACTORY 1st qtr CY22 Ipoh, Malaysia Nitrile 16 DF lines 4.5 bn

F37 Block A New Lines 2nd qtr CY22 Kluang, Malaysia Nitrile 4 DF lines 1.1 bn

F46 NEW FACTORY 2nd qtr CY22 Klang, Malaysia Nitrile 13 DF lines 3.6 bn

F41 2nd Phase Block 3 3rd qtr CY22 Binh Duong, Vietnam PVC 10 DF lines 2.4 bn

Total new capacity in CY2022 59 DF lines 16.1 bn (+15.4%)





15

16. Commentary on prospects and targets (continued)

Given the present business climate, increased M&A opportunities are also likely to present themselves, thus enabling the

Group to expand faster via the inorganic route, in addition to the organic expansion being pursued.

Top Glove noted that the pandemic had adversely impacted several businesses in the country, causing a rise in

unemployment. However, the strong global glove demand has bolstered the Malaysian economy during this difficult

period, with Top Glove intensifying its hiring and providing business to supporting industries. In the past year, the

Group has employed a total of 4,000 local employees, comprising 1,500 local staff and 2,500 local workers to enable it

to meet the growing glove demand.

In term of market capitalisation, Top Glove secured its position as the 2nd largest company on Bursa Malaysia and the 9th

largest company on SGX, with a market capitalisation of RM68.6 billion and SGD22.6 billion as at 15 September 2020.

It also remains a member of the MSCI Global Standard Index, FTSE Bursa Malaysia KLCI Index and Dow Jones

Sustainability Indices (DJSI) for Emerging Markets.

The company continues to actively engage with the U.S. Customs Border and Protection towards the expeditious

upliftment of the Withhold Release Order (WRO), for which it is making good progress.

The outlook for the company and glove industry remains very promising. With COVID-19, Top Glove estimates that

glove demand will grow by 20% per annum in 2020, 25% in 2021 and 15% post-COVID. The continuous increase in

sales orders from 195 developed and developing countries across the world, coupled with rapid growth in capacity and

significant improvements in productivity through technology augurs well for the Group’s results going forward.

Notwithstanding news of several promising vaccines in the pipeline, glove demand remains at a supernormal level, as

gloves will still be required even when a vaccine becomes available.

The Group’s monthly order book has seen a significant rise of about 150% from pre-COVID days while lead time

(delivery) has gone up from about 40 days to as much as about 400 days presently. The exceptionally strong demand

coupled with higher ASPs bodes well for the Group’s results in the coming quarters.

The Group unprecedented performance underlines the effectiveness of ongoing technology-driven improvement

initiatives, which focus on quality and cost efficiency, which have enabled the Group to meet the increase in glove

demand.

17. Variance of actual profits from forecast profits

Not applicable as no profit forecast was issued.

18. Taxation

Quarter Ended Year To Date Ended

31 Aug 2020 31 Aug 2019 31 Aug 2020 31 Aug 2019

RM’000 RM’000 RM’000 RM’000

Income tax

Current quarter/year 247,897 6,699 352,725 63,400

(Over) / Under provision (5,681) 105 (5,585) (11,867)

Deferred income tax 55,315 (6,871) 50,391 4,208

Real property gain tax 10 57 54 301

297,541 (10) 397,585 56,042

The effective tax rate of the Group is lower than the statutory tax rate due to the tax incentives available to Malaysia and

certain overseas subsidiaries.

19. Profit/(loss) on sales of unquoted investments and/or properties

There were no sales of unquoted investments and/or properties during the current quarter and financial year to date.




16

20. Purchase and disposal of quoted securities

There was no purchase or disposal of quoted securities by the Group for the current quarter and financial year to date.

21. Status of corporate proposals announced

There were no corporate proposals announced which remain uncompleted during the quarter under review as at the date

of this report.

22. Derivative financial instruments

As at 31 Aug 2020

Contract/Notional

Amount

Fair value

Liabilities

RM’000 RM’000

Forward currency contracts 289,996 871

As at 31 August 2020, the Group held forward contracts designated as hedges of expected future sales to customers for

which the Group has firm commitments. Forward currency contracts used to hedge the Company’s sales are

denominated in USD and EURO for which firm commitments existed at the reporting date, extending to November

2020.

During the year to date ended 31 August 2020, the Group recognised a gain of RM786,000 arising from changes in fair

value of the forward currency contracts.

23. Fair value hierarchy

The Group uses the following hierarchy in determining the fair value of all financial instruments carried at fair value:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 – Inputs that are based on observable market data, either directly or indirectly

Level 3 – Inputs that are not based on observable market data

As at 31 August 2020, the Group held the following financial assets and liabilities that are measured at fair value:

Level 1

RM’000

Level 2

RM’000

Total

RM’000

Assets measured at fair value:

Financial assets at fair value through profit or loss

Money market funds (quoted in Malaysia) 1,674,545 0 1,674,545

Liabilities measured at fair value:

Derivative financial instruments

Fair value liabilities 0 871 871




17

24. Group loans and borrowings

The Group loans and borrowings as at 31 August 2020 were as follows:

As at 31 August 2020


RM’000 RM’000 Current

Secured

Bank borrowings 170 11,860

170 11,860

Unsecured

Syndicated loan 0 130,882

Less: Transaction costs 0 (1,168)

0 129,714

Bank borrowings 317,208 893,911

Term loan 5,941 5,840

323,149 1,029,465

Total current borrowings 323,319 1,041,325

Non-current

Secured

Bank borrowings 33 205

33 205

Unsecured

Syndicated loan 0 523,528

Less: Transaction costs 0 (2,833)

0 520,695

Term loan 107,817 18,613

Exchangeable bonds 109,581 839,856

217,398 1,379,164

Total non-current borrowings 217,431 1,379,369

Summary of all loans and borrowings

Foreign

Currency

Denominated

’000

RM’000

Foreign

Currency

Denominated

’000

RM’000

USD 33,650 140,473 USD 475,041 2,005,479

RM 20,363 20,363 RM 91,281 91,281

THB 351,500 47,000 THB 515,802 71,075

EUR 48,829 241,484 EUR 34,324 160,047

JPY 2,340,770 91,430 JPY 2,340,770 92,812

Total loans and borrowings 540,750 2,420,694

Exchange rate RM to USD1.00 4.1745 4.2220

Exchange rate RM to THB1.00 0.1337 0.1378

Exchange rate RM to EUR1.00 4.9505 4.6628

Exchange rate RM to JPY1.00 0.0391 0.0396




18

25. Notes to the Statement of Comprehensive Income

Profit for the period has been arrived at after crediting/(charging) the following items:


31 Aug 2020 31 Aug 2020

RM’000 RM’000

Interest income 10,881 23,628

Other income including investment income 7,753 28,381

Interest expenses (2,990) (53,058)

Depreciation and amortization (65,412) (235,264)

Foreign exchange loss (63,252) (85,397)

Fair value (loss) / gain on foreign exchange contracts (51) 786

26. Material litigation

The Company and its subsidiaries are not engaged in any material litigation, either as plaintiff or defendant, which has a

material effect on the financial position of the Company and its subsidiaries, and the Directors do not know of any

proceedings pending or threatened or of any fact likely to give rise to any proceedings which might materially and/or

adversely affect the position or business of the Company or subsidiaries.

27. Dividends

The Board of Directors is pleased to declare a final single tier dividend of 8.5 sen per ordinary share amounting to

approximately RM691.8 million for the financial year ended 31 August 2020, payable on 1 December 2020.

The Board of Directors has on 11 June 2020, declared a first single tier interim dividend of 3.33 sen per ordinary share

paid on 9 July 2020, amounting to RM269.4 million for the quarter ended 31 May 2020.

The total dividend paid and proposed by the Company in respect of the financial year ended 31 August 2020 is 11.83 sen

per ordinary share represented by a payment of approximately RM961.2 million, and a dividend payout ratio of 51%.




19

28. Earnings per share


31 Aug 2020 31 Aug 2019 31 Aug 2020 31 Aug 2019

Profit net of tax attributable to owners of the

parent (RM’000) 1,291,995 74,166 1,866,999 364,678

Net interest savings from assumed exchange

of Guaranteed Exchangeable Bonds at

inception (RM’000)

1,742

2,832

6,970

16,992

Adjusted profit net of tax attributable to

owners of the parent (RM’000) 1,293,737 76,998 1,873,969 381,670

Basic

Weighted average number of ordinary

shares in issue (’000) 8,098,832 7,679,440 8,008,698 7,665,026

Basic earnings per share (sen) 15.95 0.97* 23.31 4.76*

Diluted

Weighted average number of ordinary

shares in issue (‘000) 8,098,832 7,679,440 8,008,698 7,665,026

Effect of dilution from:

Share options (‘000) 25,135 1,157 25,135 1,157

Exchangeable bonds (‘000) 51,338 393,645 51,338 393,645

Adjusted weighted average number of

ordinary shares in issue and issuable (‘000) 8,175,305 8,074,242 8,085,171 8,059,828

Diluted earnings per share (sen) 15.82 0.95* 23.18 4.74*

* For comparative purpose, the earnings per share for the quarter and year to date ended 31 August 2019 had been adjusted

to reflect the bonus issue of 2 for every 1 existing ordinary share which was completed on 7 September 2020.

29. Comparative figures

The comparative figures in respect of financial year ended 31 August 2019 have been adjusted retrospectively to reflect

the effect of the settlement pertaining to the legal proceedings of the Company and its subsidiaries, Top Care Sdn. Bhd.

and Aspion Sdn. Bhd. with Adventa Capital Pte. Ltd., ACPL Sdn. Bhd., Low Chin Guan, Wong Chin Toh and Kwek

Siew Leng. The net settlement amounted approximately RM240.4 million has been offset against the cost of investment

in the Top Care Sdn. Bhd. accounts, and consequently reduced the corresponding goodwill of the Company.

As previously stated Adjustments As restated

RM’000 RM’000 RM’000

Condensed Consolidated Statement of

Financial Position


Intangibles assets 1,256,376 (240,406) 1,015,970

Other current assets 63,511 240,406 303,917

Documents

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR … · The Condensed Consolidated Statement of Profit or Loss should be read in conjunction with the TOP GLOVE CORPORATION BHD. Company